PG&E Disputes E-mail Penalties

By Published On: October 9, 2014

Pacific Gas & Electric is insisting that sanctions and a large penalty are uncalled for in response to its admission of improper communications with state regulators as outlined in recently released email exchanges with the California Public Utilities Commission. “PG&E’s response to the violations was swift and decisive,” Martin Schenker, PG&E counsel, told administrative law judge Hallie Yacknin and commissioner Carla Peterman Oct. 7. The two are overseeing a penalty proceeding on the emails, allegedly circumventing the commission’s ex parte communications rules. PG&E released a handful of the 65,000 emails it reviewed that document communication with regulators. The released emails reveal that PG&E was “judge shopping” in January 2013. They also allege a potential quid pro quo agreement between the utility and commission president. Last month, the utility let go three utility officers for improper communications in response to the scandal (Current, Sept. 10, 2014). Schenker said this week that the personnel actions were significant. “The loss of employment is the ultimate sanction and sends a strongest message to all PG&E employees,” he said. Yacknin was not convinced. “I understand that loss of employment is a loss for an individual, but I am not sure how it harms PG&E,” she said. The utility attorney responded that dismissal of the three key officials “was a reputation and moral issue” because PG&E acts through its employees. The Utility Reform Network said the dismissals were to protect top PG&E brass. Tom Long, TURN legal director, added he had doubts about PG&E’s stance that “the right [utility] people, whoever they are, didn’t know about [ex parte violations with commissioners].” The biggest issue in the case is the size of the penalty for the utility’s purported rule violations. “We recognize that the CPUC will impose a penalty,” said Schenker. He pleaded for leniency, saying PG&E committed to complying with the letter and spirit of state rules and utility standards. The amount of any penalty would be largely determined by how many violations are at issue, whether a handful or hundreds of rule violations because they continued daily for eight months. Consumer advocates assert the fine should be $200 million, reflecting the time between the ex parte communications in January and the date PG&E revealed them eight months later. TURN along with San Bruno’s lawyer also urged that the utility be ordered to release all 65,000 emails regarding nonpublic communications with the commission. In addition, San Bruno asked the judge to ban all oral and written communications between the commission and all stakeholders—from utilities to consumer advocates—to level the playing field. “Yes, it is draconian,” city attorney Steven Wright told a skeptical Yacknin. “But, if you change the way you do business we will accomplish some of our goals,” such as greater transparency and safety, he added. San Bruno also asked the judge to require the commission to hire an independent monitor and to mandate that PG&E create a new ethics policy and practice. Yacknin said a ruling is expected in about five months.

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